In preparing for an audit of the retail footwear division of a major retail organization,the auditor gathered the following information about the organization's stores:

\begin{array} { l r r r r } & \text { All } & \text { Northeast } & \text { Southwest } & \text { Mid-Central } \\& \text { Stores } & \text { Region } & \text { Region } & \text { Region } \\& \$ 736,000 & \$ 840,000 & \$ 760,000 & \$ 630,000 \\\text { Average sales per store } & \$ 375,000 & \$ 420,000 & \$ 325,000 & \$ 395,000 \\\text { Average cost of goods sold per store } & 48 & 13 & 18 & 17 \\\text { Number of stores } & 1,800 & 2,200 & 1,850 & 1,550 \\\text { Average square feet per store } & \$ 137,000 & \$ 152,000 & \$ 140,000 & \$ 122,000 \\\text { Average sales per full-time employee } & \$ 98,000 & \$ 102,000 & \$ 82,000 & \$ 112,000 \\\text { Average wage related expense per store } & \$ 35,000 & \$ 285,000 & \$ 320,000 & \$ 115,000\end{array}

Management has centralized purchasing and uses a model based upon previous year's sales with adjustments for trends in the market place,e.g.,the trend to more casual shoes.A staff auditor has suggested that the centralized purchasing may be one of the reasons for the lower level of profitability in the Mid-Central Region.Which of the following would be the best single audit procedure to address the staff auditor's assertion?
A)Take a sample of receiving documents at stores and trace to purchase orders to determine the length of time between the purchase and delivery of the goods.
B)Interview store managers in the Mid-Central Region to determine their attitude toward centralized purchasing.
C)Perform an inventory count at selected stores in the Mid-Central Region and determine if adjustments are needed to the perpetual records.
D)Perform a product-line analysis of sales and purchases in the Mid-Central Region and compare with other regions.

Further Audit Procedures Include A)Option a B)Option B C)Option C D)Option D

Multiple Choice

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Further Audit Procedures Include A)Option a
B)Option B
C)Option C
D)Option D

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